IMF agrees to issue debt to member countries

Move increases resources of international financial institution

WASHINGTON (MarketWatch) -- The International Monetary Fund on Wednesday agreed on a framework to issue notes to its member countries for the first time, a move its director said will help the fund get assistance to members quicker and combat the global financial crisis.

The notes will have a maximum maturity of five years, the fund said in a press release, and will be tradable in the official sector, including central banks. They won't be transferable to the private sector.

"This innovative framework will further strengthen the IMF's capacity to bring rapid assistance to its members as and when it is needed," said managing director Dominique Strauss-Kahn in a statement on Wednesday.

"This new financing tool and our other financing initiatives demonstrate the commitment of the fund and its members to tackling head-on the effects of the global financial and economic crisis," he said.

China has signaled its intention to invest up to $50 billion in IMF notes, and Brazil and Russia have signaled up to $10 billion each.

The IMF's executive board didn't set a limit or cap on the amount of notes that could be issued, an IMF official told reporters Wednesday afternoon.

The move is a way to increase the fund's resources as it and its members continue to confront the global financial and economic crises.

"This framework for issuing the IMF notes marks a significant step forward in our continuing drive to make sure the IMF can respond effectively to member countries' needs in these challenging and uncertain times," said Strauss-Kahn.

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